IN A move that is likely to rekindle hopes for a number of closed
PSUs, the minister for chemicals & fertilizers Ananth Kumar said that
government proposes to from two joint ventures for the revival of closed
fertilizers plants at Talcher in Odisha and at Ramagundam in Telangana.

He stated this after a joint review meeting held on
September 26 over this issue with MoS (independent charge) petroleum Dharmendra
Pradhan. Secretary in the ministry of coal and CMD of Coal India Limited (CIL),
secretary, department of fertilizers and other officials were
also present in the meeting. The minister said an investment of about...Rs 9,000 crore
is proposed to be made towards reviving these projects.

Ananth Kumar expressed the hope that the development and
extension of Jagdishpur –Haldia natural gas pipeline in the northern and
eastern regions and Dhabol- Bangalore pipeline in the southern region are
expected to give a fillip to fertilizer plants and other industries along their
way.

The Talcher Fertilizer Unit, which has been shut down in
2002, will start production from 2018, the minister said.

State-owned companies like RCF and GAIL will form two joint
ventures to revive the closed urea plant at Talcher.

Rashtriya Chemicals and Fertilizers (RCF), Coal India, GAIL
and Fertilizer Corporation of India will form the joint ventures. The first
joint venture (JV) will be for setting up of an upstream coal gasification unit
and the second JV is for a urea-cum-ammonia nitrate complex.

Talcher will be the first plant in the country using coal
gasification technology.

“The plant will have a capacity of 1.3 million tonnes per
annum of urea and 3.3 lakh litres of ammonia nitrate per annum and around Rs
9,000 crore will be invested in this project with an aim of generating
employment,” said Kumar.

Petroleum minister Dharmendra Pradhan said since three ministries
like coal, fertilizer and petroleum are involved in the project, it has been
decided to review the progress of the project every month to ensure strict
adherence to time line as planned.

Pradhan said by November this year, the new joint venture
companies would be formed. Immediately after that, Detailed Project Report
(DPR) would be finalised and financial closure would be done to go ahead with
implementation.

The first JV will be for setting up of an upstream coal
gasification unit and the second will involve establishment of a urea-cum-ammonia
nitrate complex.

The plant will have a capacity of 1.3 million tonnes per
annum of urea and 3.3 lakh litres of ammonia nitrate.

Earlier, the ministry of chemicals and fertilizers has
decided to set up new fertilizer plants rather than restarting closed
fertilizer units, in a sharp departure from its earlier strategy. The previous
UPA government had proposed to revive urea production in country by deciding to
restart closed fertilizer factories. The proposal is to revive closed
fertilizer units of FCIL and Hindusthan Fertiliser Corporation Ltd by setting
up new plants at Sindri, Talcher and Ramagundam , Barauni, Gorakhpur, Korba,
Haldia and Durgapur.

The revival and restarting of fertilizer units has been a
long drawn strategy for the government of India but action at the ground level
has been a laggard.

In 2011, the Cabinet Committee on Economic Affairs (CCEA),
approved the Draft Rehabilitation Scheme (DRS) for revival of all the Units of
FCIL and HFCL.

As per the scheme, revival of Talcher Unit would have been
done by the consortium of Rashtriya Chemical & fertilizers Limited (RCF),
Coal India Limited (CIL) and Gas Authority of India Limited (GAIL).

Similarly, the revival of Ramagundam unit would have been done
by Engineers India Limited (EIL) and National fertilisers Limited (NFL) and
revival of Sindri unit by Steel Authority of India Limited (SAIL).

Subsequently CCEA, in 2013, approved waiver of Government of
India loan and interest to facilitate Fertilizer Corporation of India Ltd to
arrive at positive net worth.

As many as ten fertilizer plants out of 23 operated by
state-run companies are closed, while 7 others are suffering losses.

There are seven public sector undertakings (PSUs) in the
fertilizer sector having total of 23 manufacturing plants, and out of which
only six plants are in profit.